Printer Friendly

US rival splashes out on ICI paint division.

ICI has sold much of its car paint and industrial coatings business to US rival PPG Industries, which has large interests in the Midlands.

No Midland ICI plants, like Birmingham powder paint company Arthur Holden & Sons, are included in the pounds 425 million cash sale.

But PPG's UK subsidiary is based in Birmingham and it has a 400-staff manufacturing plant in Ladywood. It is a major paint supplier to Rover, Jaguar and Peugeot.

ICI has sold large interests in car and commercial vehicle paints used by the professional repair industry, including two UK plants.

It also sold off Grow Automotive, its North American solvent and thinners business, and a variety of industrial coatings businesses across Asia and Latin America.

The bundle had sales of pounds 285 million last year and contributed pounds 20 million to profits. Net assets were pounds 120 million and they employed 2,850 staff who will transfer to PPG.

None of ICI's Indian paint or coating companies were included in the deal.

ICI chairman Mr Charles Miller Smith said the company had taken the businesses as far as it could.

"As its current size, our car paint business lacks the breadth and scope which we believe is needed to achieve global leadership. We have therefore decided to exit by selling to PPG," he said.

"The deal makes excellent sense from a value perspective and enables us to focus on enhancing our position in our core paints businesses."

The deal is expected to be completed by the middle of the year in Europe and the Americas but later in Asia.

The proceeds will help reduce ICI's debt and are expected to yield a pounds 190 million pre-tax profit on disposal but have no effect on earnings over the next year.

ICI shares closed up 28p last night at 674p.
COPYRIGHT 1999 Birmingham Post & Mail Ltd
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1999 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:The Birmingham Post (England)
Date:Apr 29, 1999
Words:302
Previous Article:TRW seeks outsider as new chief.
Next Article:Picture perfect.
Topics:

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters